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TSET Endowment Keeps the Promise of 1998 Master Settlement Agreement to Invest in the Health of Oklahomans

OKLAHOMA CITY (April 17, 2013) –  A $48.6 million payment was deposited into the Tobacco Settlement Endowment Trust Fund today after Oklahoma received a $64.8 million payment as part of the 1998 Master Settlement Agreement. With the addition of this year’s payment, Oklahoma has received $1.04 billion in payments over the 15 years since the settlement.

With today’s payment, the endowment’s total balance is $797 million. Only the earnings from investments are used to fund grants and programs focused on preventing and reducing tobacco use and other programs to improve health.

Each payment from the tobacco industry is distributed three ways, 75 percent is invested in the Tobacco Settlement Endowment Trust Fund; and the remaining 25 percent is allocated between the Office of the Attorney General and the State Legislature’s Tobacco Settlement Fund.

From today’s payment, the Tobacco Settlement Endowment Fund received $48,569,402.16 for investment. The remainder of the $64.8 million payment will go to the state Legislature’s Tobacco Settlement Fund to be appropriated and to the Office of the Attorney General’s evidence fund.

“While we’ve made great strides in reducing tobacco use in Oklahoma, our state still ranks among the worst in smoking and other health issues,” said Tracey Strader, TSET executive director, “Working together, we are making a difference, but we still have a long way to go. The constitutional endowment provides a growing source of revenue dedicated to improving health for generations to come.”

Since TSET first received money from the settlement in 2001, the tobacco industry has spent over $2.5 billion in marketing their products in Oklahoma.  Cigarettes kill 1-in-3 users and have cost an estimated 72,000 Oklahoman lives since the settlement payments began. Nearly 87,000 Oklahoma kids alive today will ultimately die prematurely from smoking.  Meanwhile, health care costs directly caused by smoking top $1 billion in a single year in Oklahoma and smoking-related illnesses are the leading cause of preventable death in our state.

One of the main goals of the Master Settlement Agreement was to reduce smoking particularly among youth, and the TSET Board of Directors has made tobacco prevention its first priority.  According to the Oklahoma Youth Tobacco Survey since TSET received the first MSA payment in 2001:

  • Smoking among high school students has decreased from 24 percent to 17.9 percent.
  • Smoking among middle school students has decreased from 10.3 percent to 3.7 percent.
  • The percentage of Oklahoma households that are smokefree increased from 54.9 percent in 2001 to 75.4 percent in 2010.

As earnings have grown, TSET has also invested $45 million in research in cancer and tobacco-related diseases, as well as the Shape Your Future campaign, and community grants to improve nutrition, increase physical activity, and reduce obesity.

"Our targeted investments across the state help Oklahoma be a healthier place to live, play and work,” said Casey Killblane, TSET Board chairman. “TSET continues to support cutting edge research, community coalitions and systemic changes to tackle the leading causes of preventable death in Oklahoma. We are proud of our investment in the health of Oklahomans and our role in helping to make Oklahoma a healthier more prosperous state.”

An additional payment is expected because Oklahoma last week joined 19 other states and territories in a settlement agreement in the dispute between the three largest tobacco companies and the states over enforcement of the agreement provisions on smaller tobacco manufacturers.

Oklahoma was one of 46 states that sued the largest U.S. tobacco companies to recover tobacco-related health care costs. The 1998 national settlement agreement was negotiated by Attorneys General from eight states, including Oklahoma. The State of Oklahoma received its first payment in 1999 and payments will continue as long as cigarettes are sold.

Oklahoma voters, in anticipation of the MSA payments, approved a 2000 constitutional amendment to create the Tobacco Settlement Endowment Trust to ensure the majority of the payments would be invested and only the earnings would be used to improve the health and well-being of all Oklahomans. Oklahoma is the only state to safeguard the MSA funds for health with a constitutional amendment.

TSET is overseen by a bipartisan board, appointed by statewide elected officials. The board annually approves proposals for grants. In addition to funding the Oklahoma Tobacco Helpline at 1-800-QUIT-NOW, and the Tobacco Stops With Me campaign, the TSET board of directors has awarded grants to local communities, statewide organizations, and research institutions to address our state’s leading cause of preventable death.

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The Oklahoma Tobacco Settlement Endowment Trust (TSET) serves as a partner and bridge builder for organizations working toward shaping a healthier future for all Oklahomans. TSET provides leadership at the intersections of health by working with local coalitions and initiatives across the state, by cultivating innovative and life-changing research, and by working across public and private sectors to develop, support, implement and evaluate creative strategies to take advantage of emerging opportunities to improve the public’s health. TSET – Better Lives Through Better Health. For more information visit www.tset.ok.gov.